Arbitral procedure

By order of Presidium Supreme Arbitration Court of Russian Federation from 7/15/2010 № 2833/10 referring to item 415 Civil code the Russian Federation recognizes lawful reference in a railroad train of extraordinary expenses (subitem 2 of item 2 of item 265 Tax Code the Russian Federation) the sums of the forgiven debt (outstanding debt) in the event that the taxpayer took measures on indebtedness collecting, including the accord and satisfaction conclusion. At a pardon of a debt the taxpayer should to produce the evidence of an orientation of these actions on income acquisition to what availability at the creditor releasing the debtor from obligations lying on it, commercial interest in a pardon of a debt which, in particular, can be expressed in achievement of the corresponding accord and satisfaction directed on settlement of mutual requirements can testify. The debt pardon admits donation only in the event that the court will establish intention of the creditor to release from the debtor from an obligation on payment of a debt as gift. Thus, the above-named positions Tax Code the Russian Federation at accrual method application give possibility to the taxpayer - to the creditor under the bill of debt to correct an amount of income, before the taxation considered for the purpose, by inclusion of the sum of active debt in a railroad train of extraordinary expenses.

By order of Presidium Supreme Arbitration Court of Russian Federation (SAC RF) of 6/29/2010 № 1411/10 referring to the Order of conducting cash operations in the Russian Federation (the decision of Board of directors of the Central Bank of the Russian Federation from 9/22/1993 № 40) it is noticed that the current legislation doesn't provide an obligation of individual businessmen on оприходованию in cash desk of a cash liquidity and to observance of an order of storage of free money funds and consequently, there are no legal grounds for their attraction to managerial responsibility according to clause 15.1 of The Сode of Administrative Offences of the Russian Federation.

By order of Presidium Supreme Arbitration Court of Russian Federation (SAC RF) of 6/29/2010 № 808/10 on a question, concerning an inclusion order in expenses the organizations applying the simplified tax system (STS), expenses on a merchandise payment, acquired for the further resale, notes the below-mentioned. From the tax legislation doesn't follow that an inclusion condition in expenses of cost of the acquired and implemented goods is their payment by the buyer. According to subitem 23 of item 1 of item 346.16 Tax Code the Russian Federation at determination of tax base taxpayers consider expenses on payment of cost of the goods acquired for the further realization. By point 2 of clause 346.17 of the Code it is provided that expenses costs after their actual payment admit. At the same time by subparagraph 2 of point 2 of the named clause it is established that expenses on payment of cost of the goods acquired for the further realization, are considered as a part of expenses in process of realization of the specified goods. Thus, from the given clause follows that if the goods are acquired for the further realization, expenses on its acquisition are subject to accounting at the taxation not in process of actual payment of cost of these goods, and in process of realization to its buyer. The concept "realization of the goods" is specified by point 1 of clause 39 of the Code. So, realization of the goods transfer on a paid basis of an ownership right on the goods admits. As in Code chapter 26.2 the moment of realization of the goods isn't contained rates which determine for the taxpayers applying simplified system of the taxation, (works, services), expenses on a merchandise payment, intended for the further realization, admit, as is directly specified in subitem 2 of item 2 of item 346.17 of the Code, — in process of realization of the specified goods.

In Resolution FAC of the Moscow district (business from 5/11/2010 № А40-110111/09-80-789) isn'ted the below-mentioned. According to item 3 of item 269 Tax Code the Russian Federations join in a railroad train of expenses percent on the controllable indebtedness, calculated according to item 2 of item 269 Tax Code the Russian Federation, but the no more actually added percent. Thus the rules established by item 2 of item 269 Tax Code the Russian Federation, aren't applied concerning percent on borrowed funds if the active debt isn't supervised. Proceeding from sense of item 2 of item 269 Tax Code the Russian Federation, controllable indebtedness admits active debt of the Russian organization: on a debt obligation before the foreign organization expressly or by implication owning more than 20 percent authorized of the capital (fund) of this Russian organization, on a debt obligation before the Russian organization recognized in conformity as the legislation of the Russian Federation by the affiliated person of the specified foreign organization; On a debt obligation in which relation such affiliated person and (or) is mediocre this foreign organization act as the guarantor, the guarantor or otherwise undertake to provide execution of a debt obligation of the Russian organization. The Russian Federation doesn't provide other bases of acknowledgement of indebtedness of controllable item 269 Tax Code. Thus, item 2 of item 269 Tax Code the Russian Federation establishes certain conditions at which the indebtedness on a debt obligation admits controllable indebtedness before the foreign organization.

Resolution FAC of the Moscow district (business from 5/4/2010 № А41-3253/09) is recognized by lawful the decision of taxing authority on bringing to account for incomplete payment the UTII, VAT, unified social tax, PIT, and also for non-presentation of tax declarations on the VAT, unified social tax, PIT in the form of the penalty as the businessman in infringement of positions Tax Code the Russian Federation wrongfully applied system of the taxation in the form of UTII because the area of a leased trade floor exceeds 150 square meters. The real estate lease contract without fail should contain the information on an arrangement and the sizes of the premises (objects) transferred in rent (paragraph 2 of item 1 of item 432, item 3 of item 607 CC the Russian Federation). The trade floor area is established by data right-establishing and inventory documents (paragraph 22 of item 346.27 Tax Code the Russian Federation). Thus, a basis for determination of the area trading premises can be right-establishing documents (including the lease contract).

FAC of Moscow explains in its Ordinance of June18, 2010 № KA-А40/5959-10, that in order to free taxpayer from any charges for failure to pay certain tax, there should be an overpaid amount of the same tax and into the same budget. FAC has noted that, not paying and not paying full tax amount as a result of lowering tax base and other illegitimate tax calculation or any other unjustified action, means lowering or hiding taxes, covering up taxation objects, missing records of income, expanses and taxation objects. The main qualifying sign of offence is underreporting taxable base resulting in not paying or not fully paying the tax. Compulsory sign of an offence is the ultimate consequences coming as a result of actions described earlier in form of taxpayer's debt to his/her own budget to pay a specific debt.

Therefore, if in the previous period taxpayer prepaid taxes and the amount exceeds or equals the amount of this tax, lowered in the previous period and subjet to be paid into the same budge, and specified prepayment amount wasn't ever entered into account of other debts for this tax, there is no violation, since lowering tax amount didn't result into any debt to the budget.

Order of Moscow's FAC of 18.06.2010 № KA-А41/6142-10-P with regards to case № А-41-2510/08, where taxpayer was refused in his demand to consider tax body's decision to accrue additional VAT and tax penalty invalid, due to the fact invoices were signed by an unknown entity. The Court came to a conclusion that "the society did know show enough discretion and caution when choosing a contractor and making the contract".

By an ordinance of FAC of Moscow's district of 24.06.2010 № KA-А40/6505-10 Case No. А40-123281/09-99-925 the claim to consider tax body's decision to accrue extra tax, VAT, respective penalty amounts and impose tax sanctions was recognized legitimate, as the claimant provided all necessary primary documents to confirm expanses and VAT deduction, and there is no grounds to prove the receipt of unfounded tax benefits

By order of Presidium of SAC RF of 20.04.2010 № 18162/09, it's considered to be illegal for a tax body to deny application of VAT deductions for careless suppliers (see regulations of SAC RF of 12.10.2006 № 53), in the event when taxpayer confirms and tax body doesn't deny the records of active business transactions, attributed to reduction of income tax base.

Courts note that people made payments for acquired goods by way of money transfers into current accounts of specified suppliers. From then on, the goods were entered into books and used for production, which is confirmed by case materials, as well as primary documents and explanations of the society's workers. The expanses confirmed by respective documents, assigned to production in purposes of gaining profit from a specific business activity. Inspection did not find any circumstances that would compromise the society. Therefore, inaccuracy of invoices, signed by individuals other than those who deal with with organizational supplier papers as directors of these societies, can't be taken for a reason to recognize tax benefits unjustified without provision of other facts and circumstances. Interpretation of legal regulations contained in this order of SAC Presidium is compulsory for all and subject to examination of similar cases by arbitral courts.

Regulation of Supreme Arbitration Court of Russian Federation of 18.05.2010 № 17795/09 notes that Tax Code of Russian Federation does not give any special provisions for the format of documents confirming agent's (commissioner, mediator) service fees. According to article 1008 CC, RF during the execution of agent's contract, the agent should provide principal with reports within the terms and conditions specified in the contract. Unless specified otherwise by the agent's agreement, there should be additional documents attached to the agent's report that confirm expanses carried by the agent on behalf of the principal.